Operational overview

Feltex Footwear

Profile

Feltex Footwear comprises United Fram, manufacturers of Inyati and other leading brands of industrial leather protective footwear, Wayne Plastics, manufacturers of PVC gum boots for the local and export markets and Mossop Western Leathers.

United Fram and Wayne Plastics

Jeff Burland        Divisional director; B Compt

United Fram is a leading industrial leather footwear manufacturer producing the highest quality safety, industrial and security footwear for local and international markets. The brands are Inyati and Frams. Products are used in a wide variety of applications in diverse industries including mining, petrochemical, engineering, construction and defence. State-of-the-art robotics and machinery are employed in the manufacture of injection moulded soling.

Products include leather boots and shoes with injection moulded soles and shoes with vulcanised rubber soles. Benefits of these products include cost competitiveness, durability, heat resistance and lightweight construction. United Fram is the only footwear vulcanising and PU/rubber moulding process manufacturer in South Africa.

Wayne Plastics manufactures a wide range of PVC and PVC/nitrile gumboots and safety footwear. The company was established in response to international trends where PVC was replacing rubber. Wayne Plastics develops and manufactures comfortable industrial footwear that meets the stringent durability and safety requirements of SA deep level mining.

Wayne Plastics is the dominant force in the local gumboot market, providing a substantial base into international markets. Heavy-duty water and chemical/oil resistant boots are sold to the mining industry, while general purpose and specialist gumboots are used for food harvesting, agriculture, food processing, hygienic maintenance and other markets.

These divisions, based in Johannesburg, employ 620 people.

Feltex Footwear achieved increased profits for the year mainly as a result of improved margins. Although unit sales were similar to the previous year, the strong Rand enabled the industrial leather footwear business to import its material at lower prices than previously. However, leather industrial footwear imports, especially from China, are a challenge and this could impact on future performance. PVC gumboots continued to be shipped in large volumes to export markets but at reduced margins.

A major upgrade of technology in the plastics business was completed during the year at a cost of R8 million. The new state-of-the-art automatic machines will enhance product quality and manufacturing efficiencies.

Mossop Western Leathers (Mossop)

Andre Pelser        Divisional director; BA Law

This business unit is the largest tannery in South Africa, supplying bovine leathers to the footwear and leather goods industries. The company, established in 1846, is situated in Wellington in the Western Cape. The company employs 220 people at two plants, a wet-blue operation and a crust and finishing plant.

Mossop is a major supplier to local footwear manufacturers and also exports leather to the UK, Spain, Portugal, India and the Far East. Products are mainly focused on the school shoe market and include Grain Leathers, Tek-Tan/Eco-Tan PU Coated Leathers and Suede and Finished.

This business improved its profit by diversifying raw material procurement, strict cost control, manufacturing efficiencies, quality standards and service. The stronger Rand resulted in lower average hide prices but placed pressure on selling prices.

Despite support by some retailers for the Proudly South African campaign and the commitment of government to local procurement for public tenders, prospects for local leather and footwear manufacturers will continue to be extremely challenging due to subsidised imports from Asia and Latin America. Local footwear with strong brands, good quality standards and efficient production and service systems will continue to be significant suppliers to local retailers. Mossop aims to be the preferred leather supplier due to its reliability and rapid response capabilities.

Prospects

The footwear division has a dominant share of the local market but this is slowly eroding as the mining industry continues with mechanisation and retrenchments. Plans are being developed to expand leather footwear exports and target markets have been identified as the countries on the African continent. Agents and distributors have been appointed in several countries and the first orders have been received. Wayne Plastics' PVC boot exports are already well established and export turnover now exceeds 10% of total turnover.

On the leather footwear side, a strategy is being implemented to supplement local production with the import of certain product ranges from China where the local cost of manufacture is uneconomical. Two product ranges have been identified that complement the existing manufactured range and, depending on market reaction, this could be expanded further in the future.

The possibility of vertically integrating into compounding PVC is being investigated as this could reduce the cost of raw materials and improve competitive advantage.

A new development in both leather and plastics is the insertion of a computer chip into the footwear, which has unlimited possibilities, including access control, time and attendance and many other applications. This is an exciting and innovative development that could enhance the added value for the footwear customers.

The division is forecasting modest growth.